General Motors has revised its financial projections for 2024 upward following impressive results for the second quarter, which exceeded Wall Street estimates. The automaker has increased its anticipated adjusted earnings for the year to between $13 billion and $15 billion, from a previous range of $12.5 billion to $14.5 billion. Additionally, GM has raised its targets for operating cash flow and earnings per share, although it slightly lowered the expectations for net income attributable to shareholders to a range of $10 billion to $11.4 billion, reflecting a decrease of less than 1%.
In the second quarter, GM reported revenue of $47.9 billion, marking a year-over-year increase of more than 7% and surpassing the $45 billion expected by analysts, according to FactSet estimates. The company achieved earnings per share of $3.06, exceeding the forecast of $2.71 and representing a 60% rise compared to the same quarter in 2023. Net income climbed 14% to $2.9 billion, up from $2.5 billion.
Following this news, GM’s stock surged nearly 5% in pre-market trading on Tuesday, contributing to a 37% increase in the stock’s value so far this year. Additionally, GM recently announced a cash dividend for the third quarter after the trading session on Monday, which helped boost investor confidence.
In a letter to shareholders, CEO Mary Barra highlighted the robust performance of the company’s gas-powered trucks and SUVs. She mentioned that GM is busy launching eight new or redesigned models across different sizes in North America. Barra emphasized the company’s commitment to disciplined growth in electric vehicle production, particularly for the Chevrolet Equinox, despite earlier statements regarding challenges in meeting the goal of producing 1 million electric vehicles in North America by the end of 2025 due to market slowdowns.
Barra also announced a strategic shift for Cruise, GM’s self-driving unit, which will discontinue its Origin vehicle and instead focus on the next-generation Chevrolet Bolt for testing in Texas and Arizona. This change follows a $600 million charge linked to the halted production of the Origin in Detroit. By utilizing the Bolt, GM aims to alleviate regulatory concerns regarding the Origin’s distinct design and reduce production costs.
Furthermore, GM is restructuring its joint venture with SAIC Motor in China, where the company continues to face financial challenges, including a reported loss of $104 million in the second quarter. In June, SAIC-GM significantly cut production by 70%, resulting in vehicle deliveries that were 50% below the previous year’s figures, according to industry reports.